Summary
McKesson Corporation's (MCK) Form 10-Q filing for the period ending September 29, 2020, demonstrates a notable rebound in financial performance compared to the prior year's third quarter. The company reported a significant increase in net income attributable to McKesson Corporation, rising to $577 million from a loss of $730 million in the same period last year. This turnaround was driven by a 6% increase in total revenues, reaching $60.8 billion, primarily fueled by growth in the U.S. Pharmaceutical segment and a recovery in distribution volumes that had been impacted by the early stages of the COVID-19 pandemic. The company is actively managing its operational efficiency through various restructuring initiatives, which contributed to the reported restructuring, impairment, and related charges. Despite these ongoing efforts and the broader economic uncertainties stemming from COVID-19, McKesson has shown resilience. The company also highlighted its expanded role in distributing COVID-19 vaccines and ancillary supplies, positioning it to play a critical part in the ongoing public health response. Investors will likely focus on the company's ability to maintain revenue growth, manage costs effectively amidst ongoing pandemic-related disruptions, and navigate the significant legal and regulatory challenges, particularly the opioid litigation.
Financial Highlights
53 data points| Revenue | $60.81B |
| Cost of Revenue | $57.81B |
| Gross Profit | $3.00B |
| SG&A Expenses | $2.24B |
| Operating Expenses | $2.37B |
| Operating Income | $634.00M |
| Interest Expense | $50.00M |
| Net Income | $577.00M |
| EPS (Basic) | $3.56 |
| EPS (Diluted) | $3.54 |
| Shares Outstanding (Basic) | 162.00M |
| Shares Outstanding (Diluted) | 163.20M |
Key Highlights
- 1Revenues increased by 6% year-over-year to $60.8 billion for the third quarter, driven by growth in the U.S. Pharmaceutical segment.
- 2Net income attributable to McKesson Corporation swung from a loss of $730 million in Q3 2019 to a profit of $577 million in Q3 2020.
- 3Diluted earnings per common share from continuing operations surged to $3.54 from a loss of $3.99 year-over-year.
- 4The company expanded its role as a distributor for COVID-19 vaccines and ancillary supplies, partnering with the CDC and HHS.
- 5Operating expenses included a $69 million goodwill impairment charge related to a segment realignment.
- 6The company returned $388 million to shareholders through stock repurchases ($248 million) and dividends ($140 million) in the first six months of fiscal year 2021.
- 7McKesson is actively engaged in discussions for a broad resolution of opioid-related claims, with a proposed framework suggesting up to $8.0 billion in payments over 18 years from McKesson.